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Stock-Based Compensation
 6 Months Ended
Jul. 02, 2013
Stock-Based Compensation  
Stock-Based Compensation

6.  Stock-Based Compensation

 

The following table presents information related to stock-based compensation (in thousands):

 

 

 

Thirteen
Weeks Ended
July 2, 2013

 

Thirteen
Weeks Ended
July 3, 2012

 

Twenty-Six
Weeks Ended
July 2, 2013

 

Twenty-Six
Weeks Ended
July 3, 2012

 

 

 

 

 

 

 

 

 

 

 

Labor expenses

 

$

1,049

 

$

940

 

$

2,093

 

$

1,833

 

Other operating costs and expenses

 

52

 

48

 

98

 

95

 

General and administrative expenses

 

2,307

 

1,922

 

4,622

 

4,346

 

Total stock-based compensation

 

3,408

 

2,910

 

6,813

 

6,274

 

Income tax benefit

 

1,304

 

1,113

 

2,606

 

2,400

 

Total stock-based compensation, net of taxes

 

$

2,104

 

$

1,797

 

$

4,207

 

$

3,874

 

 

 

 

 

 

 

 

 

 

 

Capitalized stock-based compensation (1)

 

$

41

 

$

62

 

$

88

 

$

150

 

 

(1)         It is our policy to capitalize the portion of stock-based compensation costs for our internal development, construction, and legal departments that relates to activities such as the design and construction of new restaurants, remodeling existing locations, lease, intellectual property and liquor license acquisition activities and equipment installation.  Capitalized stock-based compensation is included in property and equipment, net and other assets on the consolidated balance sheets.

 

Stock Options

 

We did not issue any stock options during the second quarter of fiscal 2013.  The weighted average fair value at the grant date for options issued during the second quarter of fiscal 2012 was $12.34 per option and was estimated utilizing the Black-Scholes valuation model with the following weighted average assumptions: (a) an expected option term of 6.1 years, (b) expected stock price volatility of 39.8%, (c) a risk-free interest rate of 1.1%, and (d) a dividend yield on our stock of 0.0%.

 

Stock option activity during the twenty-six weeks ended July 2, 2013 was as follows:

 

 

 

Shares

 

Weighted
Average
Exercise Price

 

Weighted
Average
Remaining
Contractual
Term

 

Aggregate
Intrinsic Value

 

 

 

(In thousands)

 

(Per share)

 

(In years)

 

(In thousands)

 

Outstanding at January 1, 2013

 

7,414

 

$

23.98

 

4.2

 

$

66,682

 

Granted

 

386

 

35.62

 

 

 

 

 

Exercised

 

(1,819

)

27.17

 

 

 

 

 

Forfeited or cancelled

 

(154

)

23.56

 

 

 

 

 

Outstanding at July 2, 2013

 

5,827

 

$

23.77

 

4.4

 

$

108,392

 

 

 

 

 

 

 

 

 

 

 

Exercisable at July 2, 2013

 

2,935

 

$

25.80

 

3.5

 

$

48,630

 

 

The total intrinsic value of options exercised during the thirteen and twenty-six weeks ended July 2, 2013 was $11.7 million and $19.8 million, respectively.  The total intrinsic value of options exercised during the thirteen and twenty-six weeks ended July 3, 2012 was $3.7 million and $8.1 million, respectively.  As of July 2, 2013, the total unrecognized stock-based compensation expense related to unvested stock options was $14.8 million, which we expect to recognize over a weighted average period of approximately 2.2 years.

 

Restricted Shares and Restricted Share Units

 

Restricted share and restricted share unit activity during the twenty-six weeks ended July 2, 2013 was as follows:

 

 

 

Shares

 

Weighted
Average
Fair Value

 

 

 

(In thousands)

 

(Per share)

 

 

 

 

 

 

 

Outstanding at January 1, 2013

 

1,316

 

$

26.91

 

Granted

 

406

 

36.23

 

Vested

 

(168

)

14.46

 

Forfeited

 

(76

)

29.00

 

Outstanding at July 2, 2013

 

1,478

 

$

30.77

 

 

Fair value of our restricted shares and restricted share units is based on our closing stock price on the date of grant.  The weighted average fair value at the grant date for restricted shares and restricted share units issued during the second quarter of fiscal 2013 and fiscal 2012 was $39.75 and $31.08, respectively.  The fair value of shares that vested during the thirteen and twenty-six weeks ended July 2, 2013 was $6 thousand and $2.4 million, respectively.  The fair value of shares that vested during the thirteen and twenty-six weeks ended July 3, 2012 was $1.2 million and $2.4 million, respectively.  As of July 2, 2013, total unrecognized stock-based compensation expense related to unvested restricted shares and restricted share units was $28.1 million, which we expect to recognize over a weighted average period of approximately 3.7 years.